Can I buy an expensive sports bike on auto loan?

India has one of the largest two-wheeler markets globally. A lion share of the population relies on two-wheeler as the primary mode to commute to their respective workplaces. Even those who can afford cars, prefer to ride bikes given their manoeuvrability on Indian roads. With Indians becoming more and more global and expressing interest in high end two wheelers, many international two wheeler manufacturers such as Ducati, Triumph, Harley Davidson and Kawasaki are making high end super bikes available for Indians with higher disposable incomes.

As a result, most two wheeler aficionados, especially among millennials are found asking whether or not they can buy an expensive sports bike on auto loan. The question that these individuals are asking is whether there are loan options for super bikes and how their loan rates differ from car loan interest rates do. If you too are in this category, in the quest for high end two wheeler loans, here is all the information you will need.

Traditional lenders offering super bike loans

Given the popularity of these high end motorbikes and sports bikes, traditional lenders have of late introduced a new product category called “super bike loans”. Currently, State Bank of India and HDFC Bank offer a super bike loan. State Bank of India (SBI) offers a superbike loan a to salaried individuals, self-employed professional or a businessperson and even people engaged in agricultural activities (given that there is high demand for high end superbikes with a capacity 500 CC or above from northern India).

These loans are available for those with a minimum income of Rs 6 lakhs per annum for both salaried and self-employed individuals at a rate of interest of 3.65% over the 1 year MCLR of the bank that currently stands at 11.65%. The maximum tenure for a loan of this kind is 5 years and the bank finances upto 85% of the ex-showroom price of the bike. Similarly, the interest rate on HDFC Superbike loan range from 9.76% to 15.22% p.a, with a preferential rate offered to HDFC account holders.

Self employed and salaried individuals between the age of 21 and 65 can apply for the HDFC Superbike loan and should have at least two years of work experience and must be residing at the given address for at least a year. Further, if the applicant is salaried, he must have a minimum gross salary of Rs 84,000 while self-employed individuals must have a minimum salary of Rs 72,000 per annum.

Other ways to obtain a loan for a premium bike

There are other non-traditional sources such as NBFCs from where you can source your two wheeler loan as well. Some non-banking financial institutions provide premium bike loans in the range of Rs 5-10 lakhs for a period of 12-48 months depending upon your eligibility. In a nutshell, if annual income is above Rs 6 lakhs, you can easily get a loan to purchase an expensive sports bike. Though the rate of interest may be a tad higher than car loan interest rates, as a two wheeler aficionado, you are most likely to be agreeable with what is on offer.

However, if the interest rates do seem very high to you, you always have the option of setting a financial goal of a year or two away and make periodic investments through the systematic investment route of a mutual fund. That way you will a sum of money accumulated by the end of your timeframe and can take a loan for a smaller amount for a lower tenure. What’s more, it will turn out to be less of debt burden for you and will keep your credit score and credit report intact.

Check your credit health first

Therefore it may be said in conclusion that it is not difficult for you to obtain a loan for a super bike with a loan specially designed for those interested in premium two wheelers in India. However you must remember that like with any other loan, your CIBIL score will be the first assessment criteria. Your application for such a loan will only go through if your CIBIL score is 750 and above.

Therefore before you make an application for a loan for a premium bike that you have set your heart on, make sure that you pull out your credit report to ensure that your financial health is in order. This will go a long way in assuring your lender that you are indeed worth of making repaying the loan you are applying for.